The Governor of the Bank of Ghana (BoG), Dr Paul Acquah says the banking industry had become attractive and therefore each bank or financial institution was a potential for takeover or a merger target. Answering questions on developments likely to lead to the takeover of the Agriculture Development Bank (ADB) by South Africa’ Stanbic Bank and possible alliance between the Trust bank and the Merchant Bank at the quarterly press briefing of the Monetary Policy Committee (MPC), the Governor said BoG was pushing for more mergers and acquisitions as a result of the attractiveness of the industry. According to the Statesman, experts have linked the BoG’s stance to the capital adequacy requirements but Dr Acquah maintains “the industry has become very attractive, so in that sense every bank or every financial institution is a potential target for acquisition and that is not bad news, it shows that investment climate is good.” The Governor who is also the Chairman of the MPC explained that the decision to increase the capital requirements of the commercial banks three years ago to 70 billion cedis was to allow them to strengthen their capital knowing that the economic environment was being created to make investment of that magnitude profitable. “The recapitalization was done in an orderly manner and not disruptively, which I think has succeeded and in any event, there is no restriction on a bank establishing itself with a higher capital or current banks increasing their capital requirements,” Dr Acquah said. He defended that “as the banks seek to expand their portfolios and diversify their products and extend their reach to various enterprises and consumers around the economy, there will be the need for the banks themselves to add to their capital.” The Ministry of Finance and Economic Planning last week issued a statement that said Stanbic had made a proposal to takeover ADB but no decision had been made yet. However, a Deputy Governor Mumuni Bawumia said at the press conference that there were no immediate plans to increase the capital adequacy requirements of the commercial banks by the Central Bank. The last entry into the Ghanaian banking industry is the Intercontinental Bank, Ghana which was the result of a buyout of Citi Savings and Loans. The Oceanic Bank Plc is also seeking a license from the Bank of Ghana to operate in the country. Source: The Statesman